Losing a loved one is difficult emotionally, but it can also create legal and financial uncertainty. Probate and inheritance laws are complex, so it’s important to understand what happens to jointly owned property when one owner dies. Continue reading for more information and consult with a skilled estate planning attorney in Putnam County today.

What is Jointly Owned Property?

Jointly owned property is any asset that is held by two or more individuals or entities. Co-owners share the rights, responsibilities, and liabilities for the property. This type of arrangement is common among married spouses, family members, close friends, and business partners. Jointly owned property often includes:

  • Real estate
  • Bank accounts
  • Investment accounts
  • Vehicles
  • Business interests
  • Vacation homes
  • Personal property

What Happens to Jointly Owned Property When One Owner Dies in NY?

When one owner passes away, jointly owned assets may be treated differently depending on ownership structure, account agreements, language in the deed, and estate planning documents. Some jointly owned assets pass automatically to the surviving owner, while others may become part of the deceased person’s estate. Consider the following.

  • Joint tenancy with right of survivorship: This is an arrangement where, when one owner dies, their share of the asset automatically transfers to the surviving owner or owners outside of probate.
  • Tenancy in common: When one owner dies, their share of the asset becomes part of their estate and is distributed according to their will or New York intestacy laws.
  • Tenancy by the entirety: This is a form of ownership reserved for married couples. Both spouses own 100% of the property, and generally, one cannot sell without the other’s consent. When one spouse dies, the title passes automatically to the surviving spouse.

Because ownership rights can significantly affect inheritance, probate, taxes, and creditor claims, it is important to understand how jointly owned property is titled.

Does Joint Ownership Help You Avoid Probate?

Probate is the court-supervised process of settling a deceased person’s final affairs. It involves proving the validity of a will, if there is one, inventorying assets, paying off debts and taxes, and distributing the remaining property to heirs and beneficiaries. The process can be time-consuming and involves court and attorney fees, which can add up. People often wonder whether joint ownership of assets can help to avoid probate, as doing so can reduce delays, lower administrative costs, and preserve privacy.

It is possible for certain jointly owned assets to bypass probate. Survivorship rights generally allow ownership transfers to happen by operation of law, meaning that it occurs automatically without going through probate court or following instructions outlined in a will. These assets are considered non-probate assets.

It’s important to note that jointly owned property can still end up in probate court under certain circumstances. Common exceptions include:

  • Unclear language regarding ownership
  • Competing heirs
  • Allegations of fraud
  • Title defects
  • Creditor disputes

While joint ownership has benefits, it could also unintentionally disinherit family members and expose the property to divorce claims, lawsuits, and creditor issues. It is wise not to rely solely on joint ownership to avoid probate.

For more information and assistance in developing an estate plan, reach out to a skilled lawyer at the Law Offices of Andres D. Gil, PLLC today.